Aussie surprise in a Greek day

While the FX market attention is clearly dominated by the Greek run against default, today the Asian session had a little surprise as the RBA decided to keep its interest rate at 4.25%, against the 25bp cut consensus. “The accompanying statement pointed to improved financial market sentiment, although it also said there was scope for further easing “should demand conditions weaken materially””, writes Vassili Serebriakov, analyst at Wells Fargo Bank.

The CHF and the JPY are being kept from higher gains by the respective SNB and BoJ. Today, the SNB Chief stated his commitment in defending the 1.20 floor in the EUR/CHF, and Japan’s finance ministry announced its 1.02 trillion yen selling in November.

About the Eurozone crisis: “A successful resolution to the Greek uncertainty could boost the euro to a test of recent technical resistance”, says Serebriakov. “However we still believe the currency’s rally from January lows remains corrective and is unlikely to be extended significantly above current levels”.

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